Bitcoin Collapse Again to $7,000s
Bitcoin (BTC), following six days of continuous gains, experienced a steep drop on Wednesday. It plunges from the multi-week high of $8,460 to $7,800 in just a few hours. The decline was undoubtedly sharp, 8% in literal hours. But still, prices have stayed around the high-$7,000s since. And now, a lot are asking what’s next for the cryptocurrency market.
Several people are still worrying about the worst-case scenario after the 8% drop. On the other hand, there are also several prominent traders who keeps their head up high.
Prominent cryptocurrency trader Dave the Wave indicated that the crypto seems to prime to consolidate back to the $7,000-odd range. Some months ago, Dave called Bitcoin’s decline to $6,400. And now, most data he sees hints that a macro bottom was building up for the cryptocurrency.
In addition to that, Financial Survivalism stated that in his Wyckoff analysis, BTC might consolidate into this range before booming towards $9,000. And this fulfills a textbook Wyckoff Accumulation pattern.
Aside from that, the long-term fundamentals of Bitcoin remain decisively intact. At the turn of the year, BTC’s hash rate reached a new all-time high on the 1st day of 2020. The all-time high, 119 exahashes per second, or 119 with 18 zeroes after it.
Also, this happened shortly after TradeBlock, crypto research, and data firm, disclosed that 2019 was a record of the year for the Bitcoin network. This is in terms of transaction count, and the value of coins sent denominated in USD value.
The Key for Bulls
Although bulls are confident, it is essential to note the $8,400 was an extremely key level from a short-and medium-term perspective. This means that fast rejection from that level might be bearish.
Prominent cryptocurrency analyst and industry investor, Josh Rager, explained that $8,400 had been a key level of support and resistance for Bitcoin over the previous months. And the fact that BTC failed to recover again from that level on any notable time frame is a sign that they are not out of the bear woods yet. This means that investors must take BTC trades level by level every day.
Then, $8,400 is also where Bitcoin’s 20-week simple moving average lies. Moreover, this is a moving indicator that has been important in determining macro reversal points for BTC in the past 18 months.
Analyst going by The Moon noted, “This moving average has historically marked very important turning points for Bitcoin, both bullish and bearish. A rejection here could lead to a break below $6,000. If broken, BTC could reach $9,450 quickly.”
Crypto Derivatives Exchange Deribit
In other crypto news, Deribit is leaving the European Union for Panama to evade new AML rules while changing its Know Your Customer (KYC) requirements.
Deribit B.V. is the current Netherlands-based firm responsible for the Deribit.com exchange. It will finally delegate the trading platform to its daughter company, DRB Panama Inc., on Feb 10, 2020.
